Should the government secure a staff-level agreement with the International Monetary Fund by December 2022, the Ghana cedi may receive a sentiment boost, the September 2022 African Markets Revealed by Standard Bank indicates.

However, debt restructuring concerns may restrain foreign portfolio investment until such time of clarity on the mooted deal.

In its base case scenario, Africa's biggest bank foresees at least a staff-level agreement with the IMF for a funded programme between December 2022 and April 2023.

 “Our base case foresees at least a staff-level agreement with the IMF for a funded programme worth around $3.0 billion between December 2022 and Apr 2023. However, disbursement here may depend on the requisite debt restructuring requirements and the concomitant timeliness”.

The country’s gross forex reserves were down around $2.1 billion between January 2022 and June 2022 and $3.4 billion between June 2022 and July 2022.

The report added that should the government secure a staff-level agreement with the IMF by December 2022, expenditure on capital projects may have to be postponed in order to consolidate public finances. This means infrastructure projects will come to a halt at least for some time.

Current account to narrow to 2.1%

The report said Current Account deficit will narrow to 2.1% of Gross Domestic Product (GDP) in 2022, but thereafter widen to 3.6% in 2023.

“Growth in goods exports has been robust, and the rise in goods imports is gradual. Gold exports grew by 13.1% year-on-year, to $3.0 billion in June 2022, while oil exports receipts rose 61.3% year-on-year, to $2.8 billion”.

It also said oil export earnings may moderate in 2023 as international prices soften further.

Gold prices too may trend down over the coming year, although domestic production may recover further and support goods exports